Waste Management Consulting, Recycling & Logistical Solutions

Want to increase recycling and decrease the amount of trash reaching our landfills? Innovative companies are incentivizing recycling through the use of RFID (radio frequency identification) technology to track and reward – individual recycling efforts.

Introduction
Modern life has become much more complicated….and trashy! Every empty coffee cup, box of cereal, tissue, cracked CD case, etc. adds-up. In fact, every American man, woman and child produces – on average – in excess of four and a half pounds of trash (formally referred to as Municipal Solid Waste [MSW]). This represents an over 75% increase over the per capita amount generated in 1960 and a 50% increase over that found in 1980. While the per capita rate has somewhat stabilized over the past two decades, the problem is that with an ever-increasing population, the cumulative volume of MSW is rapidly expanding. According to the most recent data available from the U.S. Environmental Protection Agency (EPA), Americans produce a staggering 254 billion tons of trash each year! This represents an approximate 300% increase over the past 50 years!

And, to complicate matters even further, due to a wide range of economic, political and environmental factors, the number of landfills for all this “stuff” to be reposited into has markedly declined. In fact, today there is less than a quarter of the total number of landfills than were available in the U.S. just two decades ago! The shortage of landfill space is contributing to an escalation in “tipping fees” – the fees landfills charge to receive a ton of MSW. While tipping fees range between $10 to $30 per ton in most parts of the country, there are already severe shortages of landfill space in pockets of the country. In fact, six states – Alaska, Connecticut, Delaware, North Carolina, New Hampshire and Rhode Island – have less than five years of landfill capacity remaining. In these states, and throughout the Northeast part of the United States, tipping fees have crept much higher, ranging today between $45 and $85 per ton.

Undoubtedly, the business of “trash” – or Municipal Solid Waste – is an increasingly important one. It is also an exceedingly complex reverse logistics operation, as firms engaged in handling MSW must comply with a panoply of environmental rules and regulations, which adds significantly to their operating costs. Furthermore, there is actually – for lack of a better term – a “trash reverse supply chain” that begins when we place our household waste in a garbage bag, can or dumpster. Our trash is joined with that of other households and apartment dwellers in the local hauling trash trucks we see on our streets. Yet, with local landfills either being closed or fast-reaching their capacities, today it is increasingly common that the trash we throw out at our curbside will be loaded onto larger trucks and offloaded at transfer stations, perhaps several times, before reaching its final resting place at one of the increasingly large “superlandfills.” All of this means that the business of handling, transporting and processing MSW is becoming a more complex and more expensive logistical operation, and all signs point to no an increasingly difficult operating environment for waste management companies. Less trash to handle would significantly help the proposition.

While the trash business is an area that many would perceive as a stodgy, low-tech, low-growth business, RFID (radio frequency identification) presents some intriguing possibilities for waste management. In fact, the business model for waste handling can be reinvented with auto-ID technology, revolutionizing the way municipalities and contractors bill for trash collection, and in the process, the manner in which all of us regard “trash.” In the process, RFID holds the potential for dramatically reducing the volume of trash and increasing the amount of material being recycled. In the latter regard, RFID can – for the first time – offer real incentives for individuals to participate in recycling programs from their own homes, helping the environment and their communities – and their pocketbooks as well.

Pay As You Throw

Traditionally in the United States, trash collection has been a service performed by municipal governments – for a flat fee –for its citizens. Today, cities largely contract out for the service, leading to the rise of several large national firms that dominate the market, including Waste Management, Allied Waste, BFI, and Republic Services, as well as myriad small local firms that compete as well. Due to the necessity for such services and the steady cash flow from the monthly billing in this fixed price business model, trash collection is a financially steady and attractive – if sometimes smelly – market for waste management service providers.

However, the single rate model has been criticized not just by environmentalists, but by the Environmental Protection Agency as well. This is because the flat rate system provides no incentive for individuals to reduce the amount of waste they put out for collection. As such, heavy users pay the same as light users, making it not only inequitable, but actually harmful to the environment. This is because the flat rate pricing provides no incentive for individuals to participate in recycling programs, encourage composting, or to choose to use source reduction products and packaging. In response, some communities have went to hybrid models, charging citizens a flat base rate for a single trash container and then charging a variable rate for additional garbage collection, much akin to the airlines charging more for a second, third, fourth, etc. bag.

There is growing support for a radically different pricing model in the trash business today, known as “Pay As You Throw” (PAYT). Under the PAYT model, people pay a variable rate, based on the amount of trash they actually put out to be collected by the waste management contractor. Over 6,0000 American cities currently have PAYT systems, and in fact, some have been in place for decades. However, in the past, such systems have been based on homeowners buying stickers for each garbage can or purchasing specially authorized and/or labeled trash bags, “paying” for each container in which they could “throw” their trash away. Such long-standing PAYT systems have not gone without issues, including residents intentionally depositing their trash in other people’s containers (to avoid their own charges) and a limited rise in illegal dumping of trash in remote areas. It has also brought about what one industry expert called the “Seattle stomp” phenomenon, labeled as such because residents in Seattle, Washington and other unit pricing cities commonly compact their trash in order to avoid higher collection fees (reducing their trash output by volume, but not by weight).

Now, RFID technology is being introduced into the waste management industry, making the PAYT model workable. Texas Instruments has been a leading proponent of using auto-ID technology to not just better the business intelligence of waste management contractors (enabling them to monitor their fleets and worker performance, both for optimizing routing and quality assurance, especially when combined with GPS that is already in wide use in the industry). TI has also demonstrated the workability of PAYT in the field. The key is RFID-enabling individual trash containers. Specially-equipped garbage trucks can then weigh each “smart” trash can upon collection, making it possible to ascertain the “net amount” of garbage collected from each customer each time each customer’s trash is gathered. The collection process can remain unchanged from what it is today, as the weighing is done as the can is lifted and emptied into the trash truck by the operator, thereby not slowing down the present system performance. Texas Instruments’ tests have made use of low frequency RFID tags, due to the harsh environment and the omnipresence of both water (in the content of MSW) and metal (in the trash truck and with metal trash cans in many instances). Further, in many urban and even suburban settings, such as apartment buildings, multiple trash cans are in close enough proximity where there would be great potential for misreads and tag collision/confusion.

Whether or not RFID-enhanced PAYT would prove to be revenue enhancing, neutral or negative overall for cities and their waste management contractors remains to be seen. The accuracy possible through the use of automatic identification technology does make possible new concepts for individual accountability and tracking. However, the PAYT concept certainly encourages more individual environmental responsibility when it comes to household management of MSW. The one thing that is assured is that it does encourage folks to recycle what can recycled from their own trash, decreasing their net trash output and thus, their weight-based trash charges. With RFID making it more possible to accurately assess weight and volume-based trash charges for each customer, this will yield more recycling incentives than ever. And now, RFID is being brought to bear to directly encourage recycling through tracking and “incentivizing” the process for individuals.

Growing Recycling

According to the most recent data available (for the 2007 calendar year), the EPA found that just over a third of all MSW in the United States is recycled. Paper and paperboard is the largest category of our trash output, comprising almost a third of the total. Yet still today, barely half (54.5%) of our paper products are actually recycled. Likewise, despite intense recycling and education efforts across the beverage industry, less than half of all aluminum cans and under a quarter of all recyclable plastic bottles are actually recycled.

Why does participation in recycling efforts lag? Analysts often point to cumbersome recycling requirements imposed by cities and their waste contractors, asking citizens to not just separate their recyclables by product category, but take them to put specific items out for pick-up on specific days (i.e. glass on Mondays, paper on Wednesdays, plastics on Fridays) or to take the items to recycling collection centers, rather than setting the items out with their “normal” trash on their “normal” collection days.

Today, innovative recycling solutions providers are looking to use RFID to make recycling “easier” and to track the recycling patterns of individual households. Some are even finding a way to “incentivize” individuals into recycling behavior by not just reducing their PAYT garbage bills, but actually paying or rebating them directly for the amount of recyclabes they divert from the landfill. There are several firms vying for this market, including RecycleBank (http://www.recyclebank.com/), based in New York City, Routeware (http://www.routeware.com/), based in Beaverton, Oregon, and an Irish firm, Advanced Manufacturing Control Systems (AMCS) (http://www.amcs.ie/). Austin Ryan, cofounder and business development director for AMCS, recently commented that “Increasing recycling rates requires the deployment of creative new strategies and technologies in the waste management industry.” Each of these firms are marketing solutions whereby the recycling collection process makes use of special RFID-tagged recycling containers (using low-frequency RFID tags), which are collected by trucks equipped with smart scales that read the tags (to associate the collection with a particular customer) and to weigh that customer’s recyclables (based on the weight of the filled container versus the empty container weight).

For example, RecycleBank currently serves a number of cities – (the largest of which is Philadelphia) in the Northeast, covering several hundred thousand homes. RecycleBank’s system works in tandem with existing municipal waste management contractors’ collections, as they do not operate their own collection equipment. They do provide customers with RFID-equipped recycling carts, ranging between 35-96 gallons in size. In these bins, residents pour all recyclable materials. Once collected by RFID-equipped collection trucks, the customer’s account is credited for the weight of the contents in the cart. The recyclable materials – paper, plastics, cardboard, aluminum, etc. – are then separated at processing centers. After being separated by type, the material can then be directed towards reuse.

What are the results? Ron Gonen, RecycleBank’s cofounder and CEO, reports that the benefits of incentivizing the recycling behaviors of individuals can make whole cities much greener. In fact, Gonen reports that: “We’ve taken cities with almost no recycling and brought them to 40 percent of their trash being diverted from waste.” For municipalities and waste haulers, this means that rather than having to pay the rising tipping fees for delivering MSW to landfills, they can actually earn money on the volume of waste products that are directed towards recycling. For the customer, RecycleBank provides incentive credits based on their actual recycling volume, offering discounts and credits at hundreds of retail partners, ranging from national brands, such as Home Depot and Starbucks, to local retailers and grocery stores. Kraft Foods is one of the lead sponsors of RecycleBank, offering discounts on its family of products as incentives for consumer recycling. Kraft’s Elisabeth Wenner, the firm’s director of sustainability, says that the value proposition for her company is that by encouraging recycling, Kraft helps reduce the amount of its own and others’ product packaging in landfills. Thus, according to Wenner, “RecycleBank offers an innovative way to make it easy and rewarding for consumers to recycle.” For corporate partners, the RecycleBank incentive program offers a marketing tool to encourage both first use of their products or services and to promote repeat transactions. Thus, they are a way of “doing well by doing good,” promoting both individual and corporate environmental responsibility – and a unique marketing program at the same time.

Analysis

All in all, the Municipal Solid Waste marketspace holds the potential for rapid development over the next few years for RFID solutions providers, as well as those vendors providing the hardware and software necessary to support PAYT and for monitoring recycling. In fact, today’s economic conditions could work to benefit solutions providers in this area by accelerating the growth of both the PATY and recycling incentive programs. This is evidenced by the recent introduction of the most recent incentive-based recycling program in Michigan (see “Michigan Households Get RFID-enabled Rewards for Recycling” at http://www.rfidjournal.com/article/view/5293/). Thus, the curbside may be one of the most promising areas for RFID technology to be employed, not just for profits, but for a greener world as well through better reverse logistics management of MSW.

If you have any questions about this news or general questions about our diversified services, please contact Bob Wallace, Principal & VP of Client Solutions at WIH Resource Group and Waste Savings, Inc. at admin@wihrg.com

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